EFFECT OF TOBACCO ADVERTISING ON TOBACCO CONSUMPTION: A
DISCUSSION DOCUMENT REVIEWING THE EVIDENCE
This report reviews the evidence on the effects of tobacco advertising on tobacco
consumption, including the effect of advertising bans. The report draws on the
available published material in this field, both from the UK and internationally,
together with some original econometric work.
The report is being published as a discussion document. The Department of
Health's Economics and Operational Research Division would welcome any
comments on the overall analysis, methodology and original pieces of work in the
report. Any comments should be received by Friday 29 January 1993, and should
be addressed to:
Mr K Leaney
Economics and Operational Research Division
Department of Health
Room 2813
Millbank Tower
21-24 Millbank
LONDON SW1P4QU
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ACKNOWLEDGMENTS
This study was carried out by economists in the Economics and Operational
Research Division of the Department of Health under the supervision of Clive Smee
and Michael Parsonage. Robert Anderson was primarily responsible for drafting the
main body of the report and Annex A. Simeon Duckworth drafted Annex B as well
as undertaking the analysis which it reports.
The study benefited from comments made by medical and administrative
colleagues within the Department of Health and by economists in the Treasury;
Customs and Excise; and the Department of Trade and Industry.
Thanks are due to the Tobacco Advisory Council and Action on Smoking and
Health for contributing material and analysis which strengthened the body of
evidence on which the report is based.
Clive Smee
Chief Economic Adviser
October 1992
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CONTENTS
Page
Introduction 1
Indirect and circumstantial evidence 2
Analysis of incentive structure in tobacco market 2
Mechanisms by which advertising might increase
consumption 4
Evidence on reactions to advertisements 5
Evidence from surveys of reasons for starting
smoking 6
Other evidence of indirect effects 7
Quantitative direct evidence 7
Cross-section analysis of countries with
different levels of controls 1 0
Time series analysis of fluctuations in
advertising expenditure within countries 1 2
Before-and-after studies of consumption in
banning countries 16
Norway 17
Finland 18
Canada 19
New Zealand 20
Summary and Conclusions 21
Annex A: Time series analysis of fluctuations in
advertising expenditure within countries: further
analysis 23
United Kingdom 23
United States 29
Other countries 33
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Annex B: Analysis of tobacco consumption in Norway
and the UK; Multicollinearity
35
Norway 35
United Kingdom 40
Prevalence 47
Multicollinearity 48
References 51
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INTRODUCTION
1 . There has been much dispute about the influence of tobacco advertising on
smoking. The issue has recently been the subject of official reviews in the United
States 1 , New Zealand 2 and Canada 3 . Official reviews are currently under way
In Sweden and Germany. Chapman (1986) and Godfrey (1990) review the
literature. This paper examines the evidence on the effect of tobacco advertising,
including the effect of advertising bans.
2. There is a wide range of studies in this area following a variety of methods.
The studies cover knowledge of advertisements, reasons for starting to smoke,
opinions as to the effect of advertising on smoking behaviour and empirical work
looking at associations between smoking behaviour and advertising expenditure
over time or across countries. The Report of the US Surgeon General shows the
range of studies and gives references. The forms of evidence clearly differ in
nature. We have looked at the evidence from abroad as well as in this country and
we have carried out some analysis of our own where published studies do not
exist. We have concentrated attention on studies which follow sound methods
with a reasonable prospect of delivering reliable answers. The evidence falls into
two broad categories:
Indirect and Circumstantial Evidence
(a) analysis of the incentive structure in the tobacco market to determine
whether It is likely that advertising will be undertaken to increase overall
consumption;
(b) review of mechanisms by which advertising might increase consumption;
(c) evidence on reactions to advertisements, particularly among young
people, on the assumption that there has to be knowledge of advertising if
it is to have any effect on smoking;
(d) surveys of reasons for taking up smoking; and
(e) evidence on the indirect effects of advertising.
1 Report by the US Surgeon General Reducing the Health Consequences of
Smoking: US DHHS (1989).
2 Report by the Toxic Substances Board (NZ Department of Health 1989).
3 Appeal against the Tobacco Products Control Act (TPCA).
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Quantitative Direct Evidence
Statistical analysis of smoking behaviour or tobacco consumption in the face
of:
(a) variations in the amount of advertising;
(b) variations in the level of controls on advertising; and
(c) a ban on advertising.
INDIRECT AND CIRCUMSTANTIAL EVIDENCE
Analysis of Incentive Structure in Tobacco Market
3. The first step is to analyse the characteristics of the tobacco market to assess
whether there exists an incentive a priori to undertake advertising with the aim of
increasing overall consumption.
4. It could prove profitable for a monopolistic firm to advertise in order to expand
the market (strictly, move the demand curve outwards). The amount worth
spending depends on the cost and effectiveness of advertising.
5. In an industry with more than one supplier it is much less likely to be
worthwhile for one firm to advertise to expand the market because it only reaps
a fraction of the benefit.
6. It would pay the firms in any industry to collude to achieve the effects of a
monopoly, including advertising to expand industry sales. The tobacco industry in
this country is highly concentrated as figures summarised by Booth et a! (1990)
show. Four firms account for 99% of domestic production and 85%-90% of sales.
The largest single supplier to the domestic market has 44% of sales. While some
of the pre-conditions for successful collusion are present in the tobacco industry,
there is no evidence of collusive arrangements to promote a monopoly.
7. However, firms create a degree of monopoly for their own product by branding
supported by advertising and of course firms advertise brands not generic tobacco
products. The idea of brand loyalty merely expresses the monopoly power of a
brand. It may therefore be profitable for a firm to advertise to encourage the
uptake of smoking using the advertised brand, since in that case the firm captures
all the benefit of the increase in industry sales due to its advertising.
8. The industry states that the sole purpose of advertising is for each firm to
maintain and if possible increase market share. Analysis carried out within the
industry confirms that advertising does indeed affect brand shares. However, it
is quite possible that some people are recruited to smoking by brand advertising
even if firms do not specifically set out to attract them. As we shall see below
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most of these are likely to be teenagers.
9. It is worth looking at the nature of the product and smoking careers for the
incentives they create for advertisers. Smoking is not a necessity of life, so that
recruitment of new smokers is necessary to maintain the smoking population by
replacing those who die or give up. Advertising may therefore have a role in
promoting recruitment to this non-necessary product. Smokers typically start in
their teens. The OPCS survey of smoking among schoolchildren (OPCS (1989))
and the 1988 General Household Survey (OPCS (1990a)) show the following
pattern of smoking prevalence with age:
OCCASIONAL AND REGULAR SMOKERS 1 1988
%
Age
Males
Fern;
11-12
4
1
13
10
9
14
15
19
15
24
31
16-19
28
28
In 1 988 84% of smokers aged 1 6 or over had become regular smokers before their
twentieth birthday; 45% of male and 39% of female smokers in the 16-34 age
group started before the age of 1 6.
10. About two thirds of men who have ever smoked regularly have given up by
the age of 60 (GHS 1988 table 5.3). Nevertheless, the typical smoking career
lasts for many years. Applying current life-table methods and taking account of
the much higher death rate among smokers from 35 onwards, the typical length
of a smoking career for a man of twenty who smokes regularly is just over twenty-
six years. And of course about half of twenty-year-old smokers already have a
five-year smoking career behind them. The average smoking career for a woman
of twenty is rather higher at about thirty-three years 2 . In consequence,
1 age 11-15: occasional (current smokers usually smoking less than one cigarette
a week) or regular (one or more cigarettes a week) smokers.
age 16-19: answer of yes to "Do you smoke cigarettes at all nowadays?"
2 Relative death rates for smokers are taken from the Cancer Prevention Study II,
reported in the Surgeon General's Report US DHHS (1989), pp150-151. The
expected smoking career of twenty year old women is longer than men for three
reasons: (a) the relative mortality rates of female smokers to female non-smokers
are lower than for males in CPS II; (b) women have lower mortality rates than men;
and (c) the rate of smoking cessation among women by age 60 is lower for men:
54% against 66%.
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advertising to increase smoking prevalence, particularly among young people, has
the potential to deliver something like thirty years of consumption from each new
consumer.
11. To some, the industry's opposition to a ban suggests that advertising does
increase safes, if advertising does not increase sales, then the industry collectively
loses nothing from a ban and it gains the £1G0m or so it spends each year on
advertising. There are strong counter-arguments. To begin with, there is the
obvious point that advertising protects the branded home product against generic
imports. Secondly, advertising may offer the least costly way of increasing or
maintaining market share. Thirdly, advertising allows the maintenance of brands
with (real or imagined) characteristics which command a price premium over a
generic product. In this way ail companies could gain from advertisinc even if
there occurred no increase in total sales.
Adverti sing Might Increase Consumption
1 2. it may be worth bearing in mind the direct mechanisms by which advertising
fnc Z°!rT increase tobacco consumption (US Surgeon General's Report
iu& DnHb {1989)):
- by inducing children and
tobacco products and in this
young people to begin experimenting with
way initiate regular smoking
- by encouraging adults to take up smokincj
“ by enc °uraging existing smokers to smoke more
- by undermining existing smokers' motivation to give up
~ by erscoura gi n g former smokers to resume the habit.
Advertising may also increase smoking indirectly:
d *" 3 ™ •»“« « - h “"
harmful effeMs°y D mb C accran^ tl in n Miir aV resl,airi thair discussion of the
education messages. way res trict the flow of health
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Evidence on Reactions, to Advertisements
13. There is great concern about awareness of tobacco advertisements among
children and young people, because many (45% of male and 39% of female
smokers in the 1 6-34 age group) start smoking before the age of 16, that is,
before the age at which traders are allowed to sell them tobacco. In other words,
they start when by implication they are not old enough to take decisions about
smoking for themselves. There is also concern that advertisers may be targeting
these age groups to recruit new smokers and doing it successfully. The evidence
about awareness is beyond dispute, for example, Aitken et al (1987) in the UK
have shown that most primary school children are aware of tobacco advertising
and many can supply the brand names of cigarette advertisements from which this
information has been removed. There is even evidence of awareness of cigarette
brands among pre-schooS children (Fischer et al (1991)).
14. There is some circumstantial evidence that advertising may increase smoking
prevalence particularly among children: findings from a number of countries
indicate that by and large smokers and those who later take up smoking find
tobacco advertising more attractive and have a more positive attitude towards it
than non-smokers (Vickers (1992)).
15. The Camel advertising campaign in the US using the Old Joe character has
aroused particular concern on the score of its appeal to young people, its influence
on their smoking patterns and what it reveals about the tobacco companies'
advertising strategy and capabilities. An article by DiFranza et al (1991) shows
that a high proportion of teenagers recognise the character, higher than among
adults. This campaign provides an example of the success of advertising in
capturing brand share. It has taken Camel from nowhere in the under age smoking
market to a one third share. It has unquestionably achieved greater success among
children than among adults. The paper quotes extensive evidence of tobacco
companies' approach to marketing, some of it from the TPCA appeal in Canada,
which suggests that campaigns of this kind are typically aimed at capturing the
early teenage market and may also be intended to encourage more people in this
age group to take up smoking. However, the evidence on consumption is not
sufficient to establish that the campaign does actually increase smoking; it merely
relates to market share.
1 6. It is worth noting that in the UK a campaign of this kind making an appeal to
children, whether intentionally or not, would not be allowed under the voluntary
agreements between the government and the tobacco industry. There is
nevertheless some indication that advertising influences market share among
smokers below the age at which they can legally be sold cigarettes in the UK. A
survey by Roberts (1990) shows that brand shares among 11 to 14 year olds are
highest for the products which are most heavily advertised.
17. A survey from California reported by Pierce et al (1991) confirms DiFranza's
findings about the effect of advertising on young people. It shows that perception
of advertising is higher among young smokers (defined as 12-18) than adults;
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market share patterns over a four-year period followed perceived advertising
patterns; and changes in market share resulting from advertising occur mainly in
young smokers. Again, however, the results show that advertising influences
market share; the evidence provides no information about the influences on the
overall level of tobacco consumption among young people.
■s ij, Aitken ©t al { t argue that the positive attitudes smokers have towards
tobacco advertising indicate that they are deriving some benefit from advertising,
probably perceiving it as a form of social approval of smoking. The fact that those
who later become smokers share these views suggests that tobacco advertising
may be playing some part in breaking down the resistance to smoking based on
awareness of the health risks. Tobacco sponsorship of sport in particular may
cultivate these positive attitudes by associating tobacco with characteristics which
young people admire. Aitken 's survey suggests that the sport-sponsoring brands
of cigarette are indeed associated in young people's minds with excitino sports
{though not necessarily the sport sponsored). However, there was no difference
between smokers and non-smokers in their awareness of brand sponsorship.
19 ‘ A , r « cent 0PCS (1990b) survey of secondary school children has uncovered
H tors associated with starting to smoke. These include family structure
educations aspiration, attitudes of parents and siblings, and a reladvelj positive
Ikkk “ vvards smok ' n 9- The survey interviewed a panel at the beginning of the
o detmine a w ° e r h ^ ° f SCho ° L This lo "9^"al feature made ?o££e
children in Airctralial ‘pL^Xourabtto C ° h °' tSt ^ of 10-12 year old
of an initial survey were uncovered ? ^ adoptlon of smoking within a year
the order of importance in the ™ ° 9 ' St!0 regression. This technique allows
contribution of each factor '■ r,tnbuto y (actors to emerge and quantifies the
factors and accounts for about 7% n°r th ° f ad k ertisif19 c °™s fourth out of five
factor, unhelpfully, is age a Hme , f thfT J" 9 Vanation ex P |ai "ed. The leading
smoking prevalence among siblings and peers r S ® COnd and third
not play a part. Those stopping smokina dur’ina rhe^ ^ parental smokin 3 do
pattern, with disapproval of advertising coming third in the Tst^ ° PP ° Site
fheir HmSnsTs^ttere 8 ^ ° PCS (1 " 0b) stud V hav e
behaviour could be linked, the assr 't ' advertising to which smoking
- me associations uncovered represent circumstantial
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evidence that advertising increases tobacco consumption, it remains possible that
the causation runs in the other direction - children disposed to smoke are more
likely to react positively to tobacco advertising and show greater awareness of it.
Other Evidence of indirect Effects
22. Tobacco advertising may encourage smoking by providing smokers with an
excuse to play down the danger to their health. A survey by Marsh et a! (1983)
shows that despite the Government's own health education messages 44% of
smokers (but only 26% of non-smokers) agreed with the statement that "Smoking
can't be really dangerous or the Government would ban cigarette advertising." The
implication is that a ban would itself send a powerful health message.
23. Evidence from the US suggests that magazines restrict their coverage of the
dangers of smoking because they fear a loss of revenue from tobacco advertising.
A study by Warner et al (1992) looked at a wide range of magazines over the
period 1 959-86 and using logistic regression related the probability of publishing
an article on the health risks of smoking to acceptance of tobacco advertising in
the same year. The effect was strongly established for women's magazines in
particular, even after taking account of possible confounding variables (such as size
of readership and coverage of health issues generally). For example, the probability
of covering smoking dangers was 38% lower in magazines with average reliance
on tobacco advertising compared with magazines not accepting tobacco
advertising. There remains the problem of the direction of causation. For example,
it may be that a magazine's attitude towards smoking determines whether it will
accept tobacco advertising. However, coverage of the health risks of smoking was
related to the proportion of advertising revenues derived from tobacco advertising,
not merely whether it was accepted or not, and this tends to suggest that some
magazines have modified their stance in deference to tobacco advertisers.
QUANTITATIVE DIRECT EVIDENCE
24. It is not possible to mount a controlled experiment to examine the effect of
advertising on consumption, with one group exposed to advertising and a control
group not exposed. However, a number of situations have arisen where variations
in advertising have occurred which make it possible to investigate the effects of
exposure on consumption. Such "natural experiments" fall into three broad
categories:
(i) different levels of advertising controls seen in a cross-section of
countries;
(ii) year-to-year fluctuations in advertising expenditure within countries;
(iii) the period before and after the introduction of advertising bans in
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certain countries.
25. Advertising is only one of many potential influences on smoking in these
contexts, and it is important to control as far as possible for the influence of other
variables to avoid "confounding” - attributing the effects of other variables to
advertising. Most studies in these contexts use multivariate regression for this
purpose; those which do not are less reliable. We do not report studies whose
methods have obvious defects, such as those which note that smoking declined
following a ban and conclude that the ban caused the decline without adequate
examination of either trends before the ban or of other influences such as price
rises which accompanied a ban.
26. Regression methods nevertheless encounter a range of technical problems,
some of which are more important in one experimental context than another.
27. Some of these problems relate to the specification of the relationship, others
to weaknesses in the data, though the two sets of problems interact. We first
consider specification problems. The specification of a regression relationship
refers to its mathematical form and the variables it incorporates.
’ L he forn ? . chosen for * he re,ation ship inevitably imposes some restriction on
the effects which can be picked up. For example, a specification which expects
a ban to usher in an immediate and sustained reduction in smokina will deliver an
w. v.w. s , a kj , , ^uusumption
may last for many years, by inducing a
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teenager to start smoking, for example. This feature indicates a need to include
lagged consumption among the explanatory variables to enable the full long term
effect of the other explanatory variables to be uncovered.
32. The data base for the regression may not be ideal. Potential explanatory
variables often move together over time and this makes it difficult to distinguish
their separate effects (multicoliinearity). The data may contain measurement
errors. It is sometimes incomplete - for example, the published data on advertising
expenditure in the UK omits billboard advertising.
33. These problems affect the various experimental contexts differently.
International cross-sectional studies tend to raise the suspicion that omitted
variables such as social attitudes towards smoking play a part in low smoking
levels and in creation of a social environment favouring a ban.
34. The bulk of the published material studies the effect of year-to-year
fluctuations in advertising expenditures within countries. This experimental
context has its drawbacks as a guide to the effect of a ban:
- the effect of advertising is likely to be small in comparison with price and
income and is therefore more likely to fail statistical tests due to the
imprecision of estimates;
- the annual fluctuations presumably relate to the least productive slice of
expenditure, on the reasonable assumption that advertising is subject to
diminishing returns. Accordingly, the effect of an outright ban which cuts
away the most effective core of advertising is likely to be greater than
extrapolation would suggest. The US Surgeon General's Report (US
DHHS (1989)) presents a strong if somewhat speculative version of this
argument: since the total level of advertising expenditure which is
worthwhile to contest market share lies well above the level associated with
zero marginal impact on total tobacco consumption, a full ban could have an
effect even if the evidence based on year-to-year fluctuations points to no
effect.
35. A total ban is a much more promising experimental context which gets round
many of the difficulties inherent in the study of year-to-year fluctuations,
particularly causation running in both directions. Moreover, if there is an effect it
will be on a larger scale and should show up more clearly. It is worth bearing in
mind that the effect may also be enhanced by the accompanying publicity and by
the implicit message that government now believes that the dangers of smoking
justify a ban.
36. Predicting the effect of a ban has to rely to some degree on evidence from
other countries. A number of factors need to be borne in mind in transferring
results between countries:
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- in predicting the effects of a ban it is important to take account of the
degree of restriction already in place. Finland, Norway and Canada imposed
bans from a much lower base of restriction on advertising than New
Zealand. The UK/s current level of restriction lies closer to the pre-ban level
in New Zealand than to pre-ban levels in the other three countries (Laugesen
(1991));
- in some countries various other measures accompanied the introduction of
a ban and these are likely to have had some effect on smoking;
because of cultural factors, tobacco consumption may not react to
changes in price and advertising variables in quite the same way in different
countries;
- the degree of market power in the tobacco market may vary from country
to country and with it the proportion of advertising undertaken with a
market share objective.
s
Cross-section „ Analysis o f _Co_un tries. with Different Levels of Controls
37. i here are two international cross-sectional studies.
• , A „ studv bv Cox et al n 984) makes an attempt to assess the effectiveness of
the different approaches to tobacco advertising control policy seen in different
countries. The study identifies two basic philosophies: a legislative approach and
a piecemeal approach based on voluntary agreements. In the absence of data on
SXpenditur f in the different countries, the study resorts to an indirect
f assessing the effect of control policy on smoking. The method is to
TZIT* f r ' es rS9reSSion over a similar time period for each country using
timp trp °" spec ' f ' Cdtlon ' explaining tobacco consumption by price, income and a
“^r nt that tobacco control policy is influencing consumption
its effect should show up in the regression equation in two ways. Firstly the
p oportion of the variation in tobacco consumption explained by the regression
should be lower in the countries where the control policy is more effective^
nfluencmg consumption. Secondly, all the estimators correlated with the omitted
vanable will be biased and inefficient, but the authors focus on the effect on the
ime trend, arguing that it should plot a steeper downward course in the countries
which nave achieved more effective control as it picks up the long term effects on
*° p !, p c ° s° nsum Pt'°n- These effects are indeed found and the authors conclude
that legislative regimes work better than voluntary arrangements. However this
evidence is suggestive rather than conclusive. Other factors could account for the
S" „ results . S °* a < trends away from smoking may be stronge in Ee
control of" ^“adverSsi^ 0 ' 63 ' 6 '' 3 C " mate ° f ° Pini ° n fav0urable to legislative
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39. laugesen et al (1991) have carried out a multivariate pooled cross-
section/time series international study using a sample of annual data covering 22
OECD countries over the period 1960-1986 . The explanatory variables include
price, GDP per head, a score on a scale of 0-10 to capture the level of advertising
restrictions and certain other variables such as the proportion of tobacco accounted
for by manufactured cigarettes. The advertising coefficient suggests that for each
point on the advertising score consumption falls by 0,6%. In a second
specification the coefficients are allowed to vary over time by combining dummy
variables representing succeeding years with the year's values of the explanatory
variables. The advertising variable registered a perverse positive sign in the early
years but it became negative in the early 1 970s and has grown steadily in value
since then. There is no obvious explanation for the unexpected positive sign in the
early period. The coefficient for the latest year suggests that each point on the
advertising score would reduce consumption by 1%% (0.6% where the
coefficients are held constant over time). The UK's advertising score was 6.0 (out
of 10) in 1986, though subsequent agreements on sports sponsorship and
advertising will have increased it marginally.
40. The system for calculating a country's tobacco control score is set out in
Appendix 4 of Health or Tobacco (NZ Department of Health (1989)). A number of
features of the weighting system are open to question. For example, a ban on
television advertising gets the same score as a ban on cinema advertising, despite
the very much higher audiences for television. It would be interesting to see the
effect of different scoring systems.
41 . The main difficulty with this experimental context is uncertainty about the
direction of causation and possible confounding factors: negative social attitudes
towards smoking are likely to lead to low tobacco consumption and to strict
controls on tobacco advertising. In these circumstances a cross-section study
would suggest that advertising restrictions are responsible for low tobacco
consumption whereas in reality a third factor causes both.
1 Stewart (1991) has cast doubt on the reliability of some of the data used in this
study with all the variables affected in some degree. He argues that errors in the
data discredit Laugesen's results. However, the effects of data error are not as
serious as he suggests. The effect of "white noise" measurement error on the
advertising coefficient is clear in the case of the dependent variable and the
advertising variable, but not in the case of the other explanatory variables (Greene
(1991a)). Measurement error in the dependent variable increases the variance of
coefficients but does not bias their values. Measurement error in the advertising
variable leads to "attenuation" biasing its own coefficient towards zero.
Accordingly, errors in the advertising variable may not be critical. However,
Stewart also makes persuasive recommendations as to better ways of measuring
some of the explanatory variables. Errors in these variables impart bias to the
advertising coefficient but the direction of bias is not in general known. Stewart
does not offer a fresh analysis on a better data set. In the meantime it would be
wrong to reject Laugesen's results on the score of imperfect data.
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42. Tiie bulk of the published material studies the effect of year-to-year
fluctuations in advertising expenditures within countries, mainly this country or the
ted States. Ail the studies reported here take account of other influences on
a* onsumption to avoid confounding, not only price and income variables
but also specific health "scares" such as reports of the Royal College of Physicians.
Many of these articles are of very high quality using state-of-the-art econometric
technique. Advertising is not always the only or even the main focus of interest.
Many have found that advertising has an effect; some have not. There appears to
be a tendency for articles which have found an effect to underestimate its scale.
e [ e f sor ! is that results are usually expressed in terms of an elasticity fi gure
which implicitly invites comparison between different variables standardised on a
1 /o cll ange. However, in order to standardise the evidence with that on
advertising bans, it is more useful to show the effect using a 100% change. The
results presented in this section follow this method, though as we saw in
paragraph 34 there are good arguments for thinking the effect of a ban would be
greater than simple extrapolation would indicate.
4 J ' S p ® c,al factors are at work in different countries. Independent researchers in
the UK have to work within the limitations imposed by the incomplete advertising
data re,eased b Y the tobacco industry, covering broadcast media and the press but
omitting billboard advertising and sponsorship. The effect of this restriction
tiecame more serious following the ban on cigarette advertising on television in
1965 ‘ Radfar (1985) estimates that in the mid-1980s poster advertising
accounted for 30%-40% of expenditure on cigarette advertising. The Metra
consulting group commissioned by the tobacco industry had access to the full
advertising data apart from sponsorship which had not then, in 1 979, attained the
importance it appears to have today. Studies carried out in the United States are
particularly informative, because comprehensive data on advertising expenditure
are freely available to independent researchers.
44. The studies differ in specification, eg the presence or absence of a lag on
consumption or a carryover effect of advertising from one time period to the next.
Most studies have to rely exclusively on time series data, in the US, however it
is possible to use pooled data taking advantage of cross-sectional variation in price
across states. H
45. The results of the key published studies are summarised in the table overleaf,
bmce the full effects of a reduction in advertising may take some time to come
through, some of the studies have provided short run and long run estimates
(a owing for a habit effect). A range is shown where studies report short and long
term effects or results from different specifications. The table also shows the
publication dates of the studies and the period covered by the data they have used.
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